TWA Put Up for Sale After Failing to Block Buyout Bid : Board Calls Icahn Offeer Too Low

The board of directors of Trans World Airlines voted today to put the company on the auction block after a federal judge refused to block financier Carl C. Icahn’s $600-million buyout bid.

The board said in a statement that Icahn’s $18-a-share offer “does not reflect full value for the company” and said it will submit to a shareholder vote the best offer it receives in the next 60 days.

If no bidder tops Icahn’s offer, the company said, the company will put Icahn’s tender offer before the shareholders--but only if Icahn agrees not to vote the 25% of TWA stock that his group already holds.

In addition, the company said, it will put Icahn’s bid to a vote only if he succeeds in lining up financing, if the federal Department of Transportation “raises no objections to Mr. Icahn’s fitness to control and operate an international airline,” and if there are no other legal restrictions.

Earlier today, U.S. District Judge John M. Cannella rejected TWA’s effort to block the Icahn buyout bid, ruling Icahn had committed no “ongoing” violation of federal securities law.

TWA had bittlerly resisted Icahn’s overtures, filing suit in a Missouri state court as well as the suit decided today in Manhattan. It also had sought protection from Congress and from the Department of Transportation.